• Property agreement to sell

Hi,

I am selling a agriculture land and the buyer has agreed to make payment in cash and demand draft. He wants to register the property as per guidance value which is less than the sale consideration. He is offering to pay part of the sale consideration as advance if we register the agreement to sell . Also , the agreement to sell is valid for 90 days. My concerns 1. Is this a normal practice to register the agreement to sell.
2. What if the buyer defaults and only pays a part amount and fails to register the actual property within specified time limit. How will buyer protect his rights on the property to resell to someone else ...
3. What is the validity of such agreement to sell in the court of law... Many people have told me when if I give 90 days for completion of transaction, this agreement is valid for 3 years in the eyes of the law.

Please advise if this is a good practice.
Asked 2 years ago in Property Law
Religion: Hindu

2 answers received in 30 minutes.

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15 Answers

Yes you can register the agreement to sale with the condition and receipt of part payment with an condition to give possession after full payment to you. 

Prashant Nayak
Advocate, Mumbai
31807 Answers
175 Consultations

4.1 on 5.0

Hello, 

  1. As a seller, the Agreement to sell is favourable to you and reveals the true intentions of the buyer and if he fails to abide by the terms and conditions within 90 days you can forfeit the amounts paid and resell. 
  2. You would have to issue a legal notice to the buyer before you can resell though and you should insist to specifically include clauses in the agreement to sell to protect your interests. 
  3. Validity of the agreement is what is stipulated in the agreement and so can't stretch beyond without a further addition to the agreement. Therefore, it is advisable that you go ahead with the agreement, with advice on the draft from a seasoned lawyer. 

S J Mathew
Advocate, Mumbai
3545 Answers
175 Consultations

5.0 on 5.0

1. Registering Agreement of Sale is to ensure that the seller does not back out. Normally a very few people register the Agreement of Sale and even an unregistered Agreement of Sale with sufficient Stamp Duty affixed/stamped will be legally valid.

2.  Both the Buyer and Seller can protect their rights by inserting the clause of Breach of Contract and Penalty Clause.

3.  As per legal validity, the Agreement of Sale is valid for 3 years. 

Shashidhar S. Sastry
Advocate, Bangalore
5068 Answers
314 Consultations

5.0 on 5.0

Dear Querist

My opinion on your queries are as under: -

 

1. Yes, it is normal practice but you should mention the actual sale consideration amount in this agreement to sale, otherwise, the opposite party may pay you the amount which will be mentioned in the agreement to sale.

 

2. If the buyer defaulted in the terms and conditions of the agreement you may claim your remaining amount by the issuance of a legal notice after 90 days of the agreement and in case he fails even after the legal notice then you may file a civil suit for cancellation of this agreement before the civil court.

 

3. Registered documents are valid and enforceable in the eyes of law by the court of law. You may file a case against the buyer before the court of law under specific performance Act and claim your remaining amount with compensation and litigation charges

 

 

Feel Free to Call

Nadeem Qureshi
Advocate, New Delhi
6307 Answers
302 Consultations

4.9 on 5.0

Ask seller to arrange funds them enter into sale deed only 

 

2) you can enter into agreement for sale if you so desire 

 

3) non registration dues not affect validity of agreement for sale 

 

4) if buyer defaults in making balance payment there can be forfeiture clause that advance paid wound be forfeited 

Ajay Sethi
Advocate, Mumbai
94522 Answers
7485 Consultations

5.0 on 5.0

1. Since, the buyer is paying amount to you in advance , then for his safety he can opt for agreement to sell , and wherein all condition with the date of payment and registration of sale deed should be mentioned. 

2. If the agreement having clause of 90 days validity , then if the buyer not comply the agreement within this period then agreement will have no effect , and after sending a notice you can proceed for sell to another buyers.

3. 90 days for the performance of the agreement , but if the seller not returned the amount received in advance , then he has limitation of 3 years from the date of execution of agreement. 

Mohammed Shahzad
Advocate, Delhi
13105 Answers
195 Consultations

5.0 on 5.0

Dear Sir,

Yes, even if you mention 90 days for completion, it is valid for 3 years. The proforma is as follows. You may read and understand various clauses of it.

==================================================================================

 

AGREEMENT OF SALE

 

THIS INDENTURE AGREEMENT OF SALE entered into on this the …………… day of ………………………………… (               ) at Bangalore City.

 

BETWEEN:

Sri.

 

 

 

Hereinafter called as the “VENDOR” (which term wherever the context so requires and rationally permits such construction and unless repugnant shall mean and include her respective heirs, legal representatives, administrators, executors, assigns attorneys, etc., of the ONE PART.

 

AND

 

SRI. SANJITH KALASKAR

AGE 25 YEARS,

S/O SRI. KISHAN DUTT KALASKAR

No.74, 1st Floor, 6th Cross,

Malleswaram

Bangalore – 560003.

 

 

Hereinafter, called as the “PURCHASER” (which term wherever the context so requires and rationally permits such Construction and unless repugnant shall mean and include his respective heirs, legal representatives, administrators, executors, assigns attorneys, etc.,) of the OTHER PART.

 

 

 

WHEREAS, the vendor who is having absolute right, title interest over the Schedule Property have entered into this Sale Agreement the Purchaser by going through the documents of the schedule property whose got to know that the title standing in the name of the Vendor is legally valid. As such the Purchaser entered into the said Sale Agreement for total sale consideration of Rs.…………………/- (Rupees……………………………………….Only), tentatively.

 

WHEREAS, it is just and expedient to reduce the terms and conditions of this agreement into writing.

 

NOW THEREFORE THIS AGREEMENT OF SALE WITNESSETH AS FOLLOWS:

 

  1. The Vendor do hereby agree to sell and the purchaser hereby agree to purchase the schedule property free from all encumbrance for the amount immediately after obtaining marketable title to the Schedule property.

 

  1. That the purchasers have this day paid a sum of Rs.5,000/- (Five Thousand) only by way of cash to the Vendor simultaneously on the date of executing these presents, the receipt of which amount, the Vendor do hereby acknowledge.

 

  1. That the purchaser has agreed to pay the balance sale consideration at the time of execution and registration of the Sale Deed, in respect of the Schedule property after getting all the discrepancies cleared and after obtaining marketable to the Schedule Property. The Purchaser paying the balance of the purchase money shall as from the day hereby fixed for completion of the purchase be let into possession or into receipt of the rents and profits and shall pay all outgoing which shall if necessary be apportioned and the balance shall be paid by or allowed to the Purchaser on completion.
  2. If delay in completion arises from any other cause than the Purchaser’s own act or default the Purchaser may –

(a) At his own risk deposit the balance of the purchase money at any Bank in the name of the Purchaser or otherwise and

(b) Give notice in writing forthwith of such deposit to the Vendor and in that case the Vendor shall be bound to accept the interest allowed thereon as from the date of such deposit in lieu of the interest or net rents and profits accruing after that date which would otherwise be payable to the vendor under this condition.

 

  1. The Vendor shall after receipt of the balance sale consideration, get the Sale Deed executed and registered

 

  before the jurisdictional sub-registrar in respect of the Schedule property in favour of the purchaser from the date of obtaining marketable title to the schedule property.

 

  1. The Vendor do hereby covenant that they have not entered into any other agreement of sale in respect of the schedule property and have not forfeited their right to sell the schedule property in whatsoever manner and the vendor hereby undertakes to reimburse the entire advance sale consideration along with interest, in the event of any third party claim intervenes.

 

  1. The Vendor have agree to put the purchaser in actual physical and vacant possession of the schedule property on the date of execution and registration of the Sale Deed in favour of the purchaser or any of their nominates.

 

  1. In the event of the default on the part of the vendor to sell the schedule property, after getting the marketable title by the purchaser, the purchaser shall have the right to enforce the specific performance of the agreement.
  2. The Purchaser shall admit the identity of the property agreed to be purchased with that comprised in the documents of title offered by the Vendor by a comparison of the description contained in the Schedule hereto.
  3. If the Purchaser shall fail to comply with these conditions the deposit shall be forfeited to the Vendor who may thereupon re-sell the property at such time in such manner and subject to such conditions as the Vendor shall think fit and any deficiency in price which may happen on and all expenses attending such re-sale shall immediately afterwards be paid by the present Purchaser to the Vendor and if not so paid shall be recoverable by the Vendor as liquidated damages. Similarly if the Vendor failed to execute the sale deed within 6 months then the Purchaser has a right to take legal action.

 

  1. All the cost of the sale, such as stamp paper, registration charges, legal fee etc., shall be borne by the Purchaser.

 

SCHEDULE PROPERTY

 

All that piece and parcel of the property being a Ground 3BHK Flat bearing No.G1, 2nd Block, Govindaraja Nagar, Ward, Kalyan Nagar, Near Matha National English High School, Vijayanagar, Bengaluru.

 

 

IN WITNESS WHEREOF, the parties have here to set their hands to this agreement on the day, month and the year first above mentioned.

                                                                                    

WITNESS:

 

  1.  

                                                                          VENDOR.

 

2.

 

                                                                        PURCHASER.

 

Kishan Dutt Kalaskar
Advocate, Bangalore
6135 Answers
483 Consultations

4.8 on 5.0

1. An agreement to sell, if registered, gives puts both parties, buyer and seller, on a stronger legal footing.

2. There will be usually a forfeiture clause in the agreement which enables the vendor, if the buyer defaults, to forfeit the advance paid by the buyer and to be at liberty to sell the property to someone else.

3. There is no hard and fast rule for the validity of an agreement. It automatically lapses after the deadline.

Swaminathan Neelakantan
Advocate, Coimbatore
2773 Answers
20 Consultations

4.9 on 5.0

Dear Client,

1. It is upto the seller and buyer to have the discretion, whether to or not to register a sale agreement. Under RERA Act, 206, the provisions proscribes compulsory registration of sale agreement, whereas under the provisions of Registration Act, 1908, it is not compulsory to register the sale agreement.

2. You can file a suit for specific performance to make the balance payment.

3. The agreement for sale is valid for three years. If there is a negative clause in the agreement, say, the buyer has to register the property within three months or any such special time period', then, the limitation is extended by such period.

It is a good practice to register the sale agreement as it protects both the buyer's as well as seller's rights.

Thankyou.

Anik Miu
Advocate, Bangalore
8742 Answers
109 Consultations

4.7 on 5.0

1. If the buyer is agreeing to buy the property within 90 days then it may not be necessary to get the sale agreement registered.

By registering the agreement to sale the validity of the agreement automatically extend to three years from the date of execution.

2. If the buyer is not ready and willing to perform his part of contract within the time stipulated in ther agreement to sale the seller has powers to revoke the sale agreement deed and can even forfeit the advance amount as per the terms of the sale agreement.

3. If the time stipulated in the unregistered sale agreement if 90 days only then the time is essence of contract.

The seller can cancel the contract if the buyer is not honoring the contract within the stipulated time. 

T Kalaiselvan
Advocate, Vellore
84711 Answers
2172 Consultations

5.0 on 5.0

1. The law is very clear about it that the ,limitation period for an agreement is three years.

2. The agreement of sale can be enforced within three years from the date of its execution, provided it was executed by a registered document.

3. What buyer can do cannot be predicted, but the buyer can file a suit for specific performance of contract within three years from the date of the execution of the sale agreement.

 

T Kalaiselvan
Advocate, Vellore
84711 Answers
2172 Consultations

5.0 on 5.0

1) it depends upon clauses in your agreement 

 

2) there can be clause in agreement that in event balance amount not paid within period of 3 months agreement would stand terminated and advance payment made forfeited 

 

3) if time is essence of contract 
then agreement would not be valid for 3 years 

Ajay Sethi
Advocate, Mumbai
94522 Answers
7485 Consultations

5.0 on 5.0

- Yes, the buyer can approach the court for performance of the agreement even after passing the 90 days period , if you will cancel the agreement without giving any notice to him.

Mohammed Shahzad
Advocate, Delhi
13105 Answers
195 Consultations

5.0 on 5.0

Its better you act on the said agreement to sale agreement or cancel it by following it's terms. It depends on both the parties to the agreement to honour the same

Prashant Nayak
Advocate, Mumbai
31807 Answers
175 Consultations

4.1 on 5.0

Dear client, 

it means valid for 3 years as per the second point. 

Buyer can get stay order imposed. 

Thank you 

Anik Miu
Advocate, Bangalore
8742 Answers
109 Consultations

4.7 on 5.0

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